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Reversing Declines at GAC

Nov 9, 2008  •  Post A Comment

Cable’s Great American Country has been drawling a sad song lately, but the Scripps Networks Interactive-owned channel expects to post record revenue in the fourth quarter, the company says.
One of the more successful cable programmers, Scripps last month announced that most of its networks—HGTV, Food Network, DIY, Fine Living—posted increases in revenues or profits.
But for the second quarter in a row, GAC, the No. 63-ranked ad-supported cable network in terms of total prime-time audience in October, reported lower revenue. Scripps said GAC generated $5.9 million in revenue in the third quarter, down from $6.1 million a year ago. The network is now in 54 million homes, up from 51 million homes last year.
John Lansing, president of Scripps Network, acknowledged the weak financial performance, but said it didn’t mean the network is broken.
“GAC had experienced some declines in ratings extending into third quarter, but recovered well in September and October, driven by some major programming events,” he said.
GAC’s specials in September included “Martina McBride: Conversations From the Road” and “Kenny Chesney: Lucky Old Son.”
“We expect the upward trend to continue the rest of the year, with GAC’s original holiday programming featuring top artists such as Trace Adkins, Ashton Shepherd and Taylor Swift driving what we expect to be the network’s biggest quarter ever in Q4 in terms of revenue,” Mr. Lansing said.
But even in October, when GAC was up 19% in total viewers, those viewers were mostly on the older side. The network was down 23% among adults 18 to 49 and up just 7% among adults 25 to 54.
The network sells ads based on the older demographic, the company said.
Derek Baine, who follows cable networks for SNL Kagan, said he thinks GAC needs a makeover.
“This network has had so many problems,” Mr. Baine said, with the biggest problem being that no one is watching.
Since Scripps bought GAC in 2004, it has boosted distribution, but “it’s very tough to convince operators to give you an increase in your rate card” when the ratings are that low, he said. “And even when you reach a scale where it’s interesting to national advertisers, with ratings this low it is not that interesting unless you have a very targeted and hard-to-reach niche.”
GAC’s rival, Viacom’s CMT, also had a rough third quarter. CMT, the No. 40-ranked ad-supported cable channel, was down 29% in total viewers in the quarter.

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